JONES &AMP; MCKNIGHT CORP. v. BIRDSBORO CORPORATION

This is an action by Jones & McKnight Corporation against
Birdsboro Corporation for damages arising out of Birdsboro's
alleged breach of its contract to manufacture and deliver to
plaintiff certain automated machinery and equipment. Plaintiff
alleges that defendant did not design and manufacture the
machinery and equipment in a workmanlike manner, that it
failed to take remedial action to redesign and remake the
machinery and equipment when necessary under the purchase
agreement, and that plaintiff's production was therefore
seriously interrupted and impaired, causing plaintiff to
suffer substantial losses. The defendant moves for partial
summary judgment as to the issues of whether certain clauses
excluding the recovery of consequential damages are part of
the contract and whether certain categories of plaintiff's
requested damages must be denied as a matter of law because of
their consequential nature.*fn1 On its part, Jones & McKnight
is moving for leave to file an amended complaint adding a
second count to its original complaint charging defendant with
a wilful breach of its alleged duty to do promptly whatever
was necessary to put the machinery and equipment in operating
condition. For reasons stated below, we deny defendant's
motion for partial summary judgment and grant plaintiff's
motion for leave to file the amended complaint.

The factual background of the contract negotiations is as
follows. After prior meetings, an understanding between
plaintiff and defendant was reached on June 4, 1968, as to the
items of machinery and equipment to be manufactured by
Birdsboro and the prices therefor. The parties are in
agreement that they each contemplated that a written
confirmation would be made of their accord. On July 23, 1968,
Jones & McKnight received a written confirmation from
Birdsboro which had attached to it and incorporated into it
the Birdsboro General Terms and Conditions Form 64D. This
confirmation stated that it had to be accepted within thirty
days to become effective. It is undisputed that Jones &
McKnight did not execute and return the July 23, 1968 letter
from Birdsboro. On August 6, 1969, Jones & McKnight sent a
letter to defendant embodying the detailed order for machinery
and equipment, requesting the return of a signed copy if
acceptable. A portion of the letter stated:

"Confirming the discussion between your
representative and our company on June 10, 1968,
regarding the above orders, we are pleased to
submit written verification of our verbal orders
No. 2062 and 2063. * * *.

"It is understood that your General Terms and
Conditions as set forth on your form 64D will
govern * * *"

Birdsboro claims to have returned the requested signed copy of
this letter, but plaintiff denies ever having received it.

For purposes of this summary judgment motion, Birdsboro
contends that it is immaterial whether each party ever
received the acknowledged return of its own memorandum from
the other party. We agree. In an endeavor to bridge the legal
abyss created in contract formation by industry's perennial
battle-of-the-forms, the draftsmen of the Uniform Commercial
Code included several provisions in the Act highly relevant to
the type of situation before us.

Because no dispute is present that a contract in fact exists,
the terms of the contract consist, at the least, of those
terms on which the writings of the parties agree. As both
parties have written and signed confirmatory memoranda
recognizing that the terms of Birdsboro's General Terms and
Conditions Form 64D were to govern the contract, we conclude
that those terms are embodied and incorporated into the
contract.

Section 2-202 of the Code, Ill.Rev.Stat., Ch. 26, § 2-202,
supports this conclusion and obviates the necessity of
determining, as plaintiff suggests we must do, whether the
contract was oral or written. This section provides:

"Terms with respect to which the confirmatory
memoranda of the parties agree * * * with respect
to such terms as are included therein may not be
contradicted by evidence of any prior agreement
or of a ...

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